Scottish Widows has published a new report outlining how the pensions industry can help deliver a ‘just transition’ on the path towards a decarbonised global economy.

According to Scottish Widows, the plan allows for the transition to a low-carbon environmentally sustainable economy without leaving people behind.

To achieve this, the report has pointed to the £3trn worth of investments the UK pensions industry controls as an indication that it can have significant sway on how equitably the shift to a low-carbon economy happens.

The report also looked at the concerns that the move towards a low-carbon economy could deepen inequalities, such as access to health and education, and demographic factors such as race and gender.

Scottish Widows included 15 key recommendations for government and industry to achieve the transition, suggesting that pension funds should encourage the government to enhance or create polices in support of a ‘just transition’.

Also included in the recommendations was encouragement for investors to incorporate qualitive and quantitative social considerations alongside usual environmental metrics when designing investment policy and the suggestion that the government should make ‘just transition’ considerations a central component of net-zero policy.

Scottish Widows head of pension investments and responsible investments, Maria Nazarova-Doyle, commented: “There is – rightly – a lot of attention on climate change and how the pensions industry can play a part in achieving net zero.

“However, the same focus hasn’t yet been applied when we think about what the transition to net-zero will mean for us as a society. This is not only an environmental issue, but a social one too.

“As ever, our responsibility is to support our customers’ financial futures and so it is vital we manage their investments with a long term, responsible outlook.

“As an industry, we must make sure we are part of the conversation around the Just Transition, and engage and educate companies through active stewardship, to ensure this happens in a way that is fair and just for everyone.”

The considerations in the report build on Scottish Widows’ industry-first Climate Action Plan and overall Responsible Investment and Stewardship Framework for achieving a fully net-zero portfolio by 2050 or sooner.

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